Rural water and sanitation services – Stocktaking from Moldova Danube Water Conference

1. Rural water and sanitation services – Stocktakingfrom Moldova Danube Water Conference 17-18 May, Vienna Ion Lica Principal Consultant of Water Management Direction

2. The Republic of Moldova • General • Independent from the Soviet Union since 1991 • Population of about 3 million • Highly dependent on remittances and international aid • Agriculture is the main economic activity • Association Agreement with the EU signed in 2014 • Water resources • High vulnerability to climate change • Surface and groundwater pollution

3. Water and Sanitation in Moldova Overall access & organization of services • High discrepancy between urban and rural zones in term of access to water and sanitation services • Legal framework in a transition process and partially harmonized with EU acquis • No single line ministry • New regulatory agency (ANRE) which has started to fulfil its role • Local autorities are responsible for providing water and sanitation services to the population Source: Access in 2012, National Water & Sanitation Strategy, 2014

4. Water and Sanitation in Moldova Strategy on drinking water and wastewater (2014-2028) General objective: to gradually grant access for all communities and population of the RM to safe water and adequate sanitation Specific objectives • Decentralise public water supply and sanitation services • Expand the centralised water supply and sanitation systems and increase the access of the population to these services The ultimate goal of regionalisation is to create 3-5 regional companies that will provide water supply and sanitation services, except for small villages But the reality represents a challenge! • Fragmented territorial administration (1681 villages, 32 districts) • 50 urban water utilities • 50% of the population without access to WSS services lives in villages below 2’500 inhabitants

5. Progress and challenges in regionalisation of water and sanitation services Progress • New concept which started in 2010 with the pilot project financed by EBRD, EIB, EU in 6 districts comprising 43 localities • 9 regional operators so far with Joint Stock Company status • Expanding services in neighboring localities but still within district boundaries • 1 regional operator with multiple local authorities as shareholders • High interest from stakeholders/donors in regionalization • Bottom up process: local authorities create joint stock companies for service provision • Clearer legal framework • Concept of regionalization of public services of water supply and sewerage • Regionalization Guide for the public services of water supply and sewerage

6. Progress and challenges in regionalisation of water and sanitation services Expected results • Reduce operation & maintenance costs (economy of scale) • Contribute to ensuring the universal access • Improve access to international and private funds • Develop cooperation mechanisms between local authorities Challenges • Concept not clear and well understood • Lack of common approach between actors • Low cooperation culture and fear of local authorities to lose control over service provision • Lack of good practices • Complex procedures for the setting-up of regional operators • Financial position of utilities compromise formation of regional operators

7. Beyond regionalization: how are services in rural areas organized? Baseline Research on rural water and sanitation in Moldova Key findings & recommendations

8. Urgent need to better understand rural services and evidence-based recommendations for rural areas • High discrepancy in access to between urban and rural zones • Investments take place in urban zones while over half of those without access live in settlements below 2’500 people • Regionalizationdid not yet result in significant changes for rural areas • Lack of data: especially on service levels, sanitation and performance of rural providers Part of a regional World Bank study: “Beyond utility reach? Addressing rural services in the Danube Region”

9. Inequalities of service levels for water supply Non-connected households Connected households Source: MICS 2012 The lowest quintile has 35% access to piped water inside the dwelling versus 79% for the wealthiest quintile Source: HBS, 2015

10. Households connected to water systems enjoy better services but safety still compromised Non-connected households Accessibility: 30% have water piped in their home/yard, 30% spend more than 30 minutes per day Water quantity: high satisfaction Water quality: high satisfaction despite high contamination of shallow aquifers, limited practice of household water treatment Reliability: good Affordability/willingness to pay: 75% of ownership and 30% with electrical pump; WTP for piped water 0.2-0.5 Euro/m3 Connected households Accessibility: 75% with home connection, 25% with yard connection Water quantity: between 30 to 100 liters/capita/day Water quality: aquifers with natural contamination, water treatment usually not performed by operators; low compliance on test Reliability: 24/24h service delivery Affordability: 0.20 up to 0.50 Euro/m3 of water consumed; based on 70 lpcp, this presents up to 2% for households on less than US$ 2 per capita per day Source: primary data collection

11. Sanitation facilities: whose reality counts? 50% with improved sanitation facilities • Majority of households rely on pit latrine which are usually not emptied • Few have flush toilets connected to sewerage, septic tanks, cesspits or soak pits • Only 50% of surveyed sanitation facilities are improved as per JMP • Gap between actual sanitation situation, expressed needs and satisfaction • Satisfaction level acceptable • High “interest” to connect to sewerage (and stated WTP) • Majority of households connected to water supply systems, do not have flush toilets or in-house plumbing 50% with unimproved sanitationfacilities Source: primary data collection

12. Important role but limitedmeans to fulfil local authorities mandate in providing WSS services Role • Financing of infrastructure and ownership of assets • Organizing the administration of systems and service provision • Approving tariffs Capacity • Limited support provided to implement their mandate • Limited source of funding for investments • Low local budget derived from local taxes only • High dependency on national funds and donors • 80% did not access national funds in past fiscal year • Limited capacity to determine tariff Source: primary data collection

13. Local municipal operators are critical for rural service delivery but neitherrecognizednorsupported • The majority of management models are outside regulatory framework • No institutionalized support in place: local operators are completely left aside • Low operational performance, although with support this can be altered • In 30% of cases, tariffs cover O&M costs, but not major repairs Going forward: is a complementary transitionary approach needed to support local governments and local operators? Source: primary data collection

14. Emergingrecommendations to address challenges in rural areas • Accelerate regionalization and develop incentives for collaboration between local authorities • Support localities – with TA and/or investments - in entering into cooperation with regional operators • Provide a transitory framework for regulation of local municipal operators and promote formal delegation to licensed local operators • Develop and institutionalize support to local operators to increase their capacities and encourage compliance with regulatory requirements • Improve financing sources and efficiency of investment process • Consistent and transparent criteria for project selection

15. Looking at the biggerpicture: how to go about the SustainableDevelopment Goals • Adopt a national master planning approach for urban and rural areas to attract financing in a strategic manner: • Prioritize investments with consideration to equity • Scope/delineation for regional and decentralized management solutions • Prepare underlying financing strategy for the most efficient use of public funds • Explore and promote a variety of sanitation solutions beyond sewerage • Anchor solutions on real situation on the ground • Promote on-site sanitation and service chain for fecal sludge management • Recognize step-wise implementation of collective sanitation systems